TIP: Notice how the columns on this statement foot and crossfoot.
Explanation: A corporation is to disclose all changes that took place in all stockholder equity items during the reporting period. A convenient and effective way of meeting that requirement is to present a stockholders' equity statement (sometimes called a statement of stockholders' equity). When this statement is presented, it replaces the retained earnings statement because it contains all the information that a retained earnings statement would contain plus data regarding changes in other components of stockholders' equity.
The computations for the stock dividend are as follows: